EDUARDO C. ROBRENO, District Judge.
Presently before the Court are five motions to dismiss the two Complaints of Plaintiff, G. Veronica Willard. The Court need only address one of these motions: the "Motion to Dismiss Amended Complaint by Defendants Bank of America,
I. FACTUAL AND PROCEDURAL HISTORY
On March 15, 2016, Plaintiff filed a class action Complaint pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. § 1692-1692p; the Pennsylvania Fair Credit Extension Uniformity Act, 73 P.S. § 1692-1692p; the Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1 through 201-9.3, and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961-1968. ECF No. 1. She also raised state law claims for unjust enrichment and fraudulent misrepresentation. Plaintiff sued Bank of America ("BOA"), Banc of America Consumer Card Services ("BACCS"), BA Credit Card Funding ("Funding") (collectively the "Bank Defendants"), Blatt, Hasenmiller, Leibsker & Moore, LLC ("BHLM")
Plaintiff alleged that she opened a credit card account with BOA on August 24, 2004. She asserted that at some point thereafter, BOA sold the receivables for the credit card account to BACCS, which in turn sold them to Funding, which ultimately sold them to Wilmington Trust Company. Wilmington Trust is not a defendant. She further alleged that despite the sale, BOA still accepted her payments. Plaintiff eventually stopped making payments on her credit card and BOA commenced a collection lawsuit and was awarded a judgment against her on February 5, 2016.
Plaintiff claimed that by securitizing the credit card receivables and selling them to Wilmington Trust, BOA relinquished its beneficial interest in the entire credit card account and she no longer owed a debt to BOA. Thus, she contended that BOA had no right to collect the credit card payments or attempt to collect from her when she defaulted.
Plaintiff also asserted that, even if the sale of the receivables was possible, the Bank Defendants failed to follow the proper procedures after she defaulted on her debt. Specifically, she contended that the receivables could not be returned to BOA so that it could start a collection action until Wilmington Trust filed a UCC termination statement.
On May 11, 2016, BOA filed a motion to dismiss the Complaint. ECF No. 8. On May 18, 2016, BHLM moved for leave to join the motion. ECF No. 12. Plaintiff then sought in an unopposed motion additional time "to respond to the Motion to dismiss," ECF No. 16, which the Court granted. ECF No. 18.
However, on June 30, 2016, instead of filing a response to the motion to dismiss, Plaintiff filed an Amended Complaint. ECF No. 20. The Amended Complaint is substantially the same as the original Complaint. Most of the changes represent argument against assertions made by the Bank Defendants in their first motion to dismiss and the addition of paragraphs concerning the filing of UCC termination statements. Plaintiff also adds a seventh count for civil conspiracy, essentially alleging that numerous organizations have engaged in the alleged scheme, including Defendants. This count is the only place BHLM is specifically named in the Amended Complaint, other than in the caption.
On August 2, 2016, the Bank Defendants filed their motion to dismiss the Amended Complaint. ECF No. 29. On August 22, 2016, Plaintiff filed her response to both BHLM's and the Bank Defendants' motions to dismiss the Amended Complaint. ECF No. 34. On August 24, 2016, the Court held oral argument regarding the pending motions. ECF No. 35. Without leave, Plaintiff then filed a supplemental response on August 28, 2016. ECF No. 36.
II. LEGAL STANDARD
A party may move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). When considering such a motion, the Court must "accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party."
The pleadings must contain sufficient factual allegations so as to state a facially plausible claim for relief.
As previously stated, this opinion will focus on the Bank Defendant's motion to dismiss the Amended Complaint, ECF No. 29, as with the disposition of this motion, all other motions become moot.
A. The Effect of the Securitization of the Receivables on the Credit Card Account
Plaintiff's first contention — that BOA loses all interest in the credit card account once it sells the receivables — has been raised previously by this Plaintiff's counsel and rejected by this Court in a decision subsequently affirmed by the Third Circuit.
The Bank Defendants argue that Plaintiff is relying on a flawed theory that when
The identical argument, based on nearly identical facts was raised in
On appeal, the Third Circuit Court of Appeals affirmed Judge Pratter's decision holding that "Scott misapprehends the effect of securitizing a credit card receivable. `Credit card securitization involves the securitization solely of the receivables, not of the accounts themselves.'"
B. The Necessity of Filing a Termination Statement before Removing the Receivables from the Trust
Plaintiff also contends that even though the Pooling Agreement provides that when a credit card account goes into default the associated receivables are automatically removed from the trust and returned to the Bank Defendants
Plaintiff asserts two arguments why there is no legitimate automatic reversion of the receivables and instead a termination statement must first be filed. Plaintiff's arguments amount to a straw house built on the sand — their foundations shift and are ultimately insubstantial.
First, Plaintiff contends that U.C.C. § 9-513(c), regarding termination statements for other collateral, controls. The plaintiff in
Nonetheless, even if the provision is relevant, it does not present the answer Plaintiff seeks. U.C.C. § 9-513(c) provides that after a secured party (here, Wilmington Trust) receives a demand from the debtor (here, BOA), the secured party shall send to the debtor a termination statement. Comment 2 of this provision continues: "no compulsion is placed on the secured party to file a termination statement unless demanded by the debtor." U.C.C. § 9-513 cmt.2. Thus, only if BOA demands a termination statement would it be necessary for Wilmington Trust to file one. Plaintiff's argument dissolves in light of the fact that she cites no authority indicating that BOA had an obligation to make that demand. Since BOA did not make such a demand (and indeed alleges that it never securitized and sold off Plaintiff's receivables in the first place), Wilmington Trust was under no obligation to file a termination statement.
Second, Plaintiff contends that the Bank Defendants' own Pooling Agreement indicates that Wilmington Trust was required to file a termination statement. This is not specifically true, however. What Plaintiff actually argues is that Exhibit G to the Pooling Agreement, which is a sample form for the reassignment of receivables, provides in part:
Am. Compl. Exh. A Pooling Agreement Exhibit G ¶ 3(b) ECF No. 20 at 164. Plaintiff points to no provision requiring the parties to use this form and the Court finds that Exhibit G is merely illustrative. Indeed, the actual Pooling Agreement clearly specifies that when an account falls into default, the associated receivables are automatically ejected from the trust and sold back to the Bank Defendants with no further action necessary.
In summation, Plaintiff's argument is again rejected by this Court. Plaintiff admits
The bedrock of Plaintiff's Amended Complaint is unsound. This Court, as well as the Third Circuit Court of Appeals and many other courts across the country have concluded that a bank does not lose its interest in a credit card account when is securitizes the receivables associated with the account.
Moreover, Plaintiff has failed to establish that before receivables associated with a defaulted credit card account may be transferred from a trust back to the bank that issued the card, the bank
An appropriate Order follows.
1. the "Motion to Dismiss by Defendants Bank of America, N.A., Banc of America Consumer Card Services, LLC, and BA Credit Card Funding, LLC" (ECF No. 8), is
2. "Defendant, Blatt, Hasenmiller, Leibsker & Moore, LLC's, Motion for Leave to Join Bank of America's Motion to Dismiss Plaintiff's Complaint with Prejudice" (ECF No. 12), "Defendant, Blatt Hasenmiller, Leibsker & Moore, LLC's, Motion to Dismiss with Prejudice and/or Strike Amended Complaint, Filed 6/30/16" (ECF No. 23), and "Defendant, Blatt Hasenmiller, Leibsker & Moore, LLC's, Motion to Dismiss with Prejudice and/or Strike Amended Complaint," amended (ECF No. 25) are
3. The "Motion to Dismiss Amended Complaint by Defendants Bank of America, N.A., Banc of America Consumer Card Services, LLC, and BA Credit Card Funding, LLC" (ECF No. 29) is
The Clerk of Court shall mark this case as
BHLM also noted in the Joint Rule 26(f) status report, ECF No. 32 at 3, that Plaintiff withdrew an appeal of the February 5, 2016 arbitration award in Philadelphia in the full amount of the debt at issue here. BHLM stated at the hearing that it would file the judgment and suggested that it would have claim preclusive effect in this case. BHLM has not yet provided proof of the filing, thus, the Court will also not entertain this argument further.